(Montel) Nordic power prices could reach new lows next year due to high reservoir levels and rising wind power capacity, said chief analyst Sigbjorn Seland at StormGeo.
“The probability increases for another ‘annus horribilis’ for Norwegian hydropower producers,” Seland told Montel on Wednesday, pointing to very wet weather forecasts.
The Nordic system price has averaged EUR 10.45/MWh so far this year, the lowest since the joint Nordic market was established at the turn of the century and down from EUR 38.94/MWh in 2019.
The fundamental situation didn’t indicate a swift recovery next year, said Seland. He added the region’s hydropower reserves in reservoirs, snow and soil currently stood 18 TWh above normal and would likely rise amid wet forecasts for the next two weeks.
The Cal 21 contract was last seen at EUR 19.40/MWh, down more than EUR 6 since 9 October.
The bearish weather comes on top of negative news over the spread of Covid-19 across Europe, which is depressing the carbon and commodity markets, said Seland.
Installed wind power output in the Nordic region has increased by almost 6 GW since last year, according to Montel’s Energy Quantified.
However, a Norwegian trader said hydropower producers would probably generate a lot more during Q1 than during the same this year to boost exports and avoid a similar oversupply during summer.